open architecture

Thirty-five years ago today, IBM introduced its first personal computer, or PC, complete with an operating system.

By today’s standards, the computer’s specifications were unimpressive: 4.77 MHz Intel 8088 microprocessor, 16 kilobytes of memory (expandable to a whopping 256kb!), an external cassette or floppy disk drive, and an optional color monitor. The price was a cool $1,565, nearly $4,000 in today’s money. Gazoinks!

Yet the IBM PC was a momentous leap in consumer technology for a number of reasons, including its distribution and its components.

Unlike previous attempts within the fledgling personal computing market, the IBM PC was distributed through established retail chains, like ComputerLand and Sears Roebuck. This created widespread availability across a very large geographical area, so interested consumers could easily find and purchase the product.

Another distinguishing factor about the IBM PC is its use of off-the-shelf parts. This open architecture made manufacturing, repairs, and upgrades easier, while also exposing the market to competition.

Not surprisingly, it did not take long for IBM clone computers to appear on the market. Increased competition fueled innovation, and consumer demand for personal computers swelled. Thanks to plenty of supply and economies of scale, personal computers became more affordable to consumers. By the end of the decade, the number of personal computers in use in the United States had jumped from about 2 million in 1981 to nearly 54 million in 1990 (according to the International Data Corporation).

Corporate Innovation

In hindsight, the shift from office automation to personal computing was a good move for IBM. But it was highly controversial within the company at the time. How could such a large and notoriously bureaucratic corporation be so innovative?

The answer is the use of independent business units, or IBUs. IBUs are dedicated subsets of large organizations designed to operate relatively independently for a focused purpose, such as innovative technology. IBUs enjoy funding from the corporate coffers, while their smaller size gives them the benefit of faster decision-making processes.

This is precisely what IBM did in the late 1970s and early 1980s to develop its personal computer, within an independent business unit nicknamed “Project Chess”.

Conclusion

Personal computing has certainly come a long way since 1981. Sure, our smartphones are more powerful than IBM’s 1981 PC. But let’s still take a moment to pause and appreciate the spark of innovation that helped bring computers into our homes.